Content is King: The Compass and Anywhere Deal

/
 
 

Compass announced it was acquiring Anywhere Real Estate, creating a behemoth with 210,000 agents and close to 20 percent market share in the U.S.

Why it matters: The obvious play is consolidation, but the power move is leverage to further Compass’s strategic aims with exclusive inventory.

  • Content is King: this deal gives Compass control over a massive amount of inventory, and fuels its push against Zillow, NAR, and the MLSs.

 
 

The best way to unpack the strategic significance of this deal is through Robert Reffkin’s (Compass CEO) own words.

  • Compass is a very disciplined corporate communicator, and Mr. Reffkin’s social media posts reflect the talking points and strategic direction of the company.
     

  • The most obvious benefit of exclusive inventory is driving homebuyers to Compass agents for access to inventory they can’t find anywhere else.

 
 

Mr. Reffkin believes agents – all real estate agents – are being exploited, with money flowing out of their pockets to the real estate portals, NAR, and MLSs.

  • The counter-argument is that the only reason Compass is doing this is to enrich itself and its shareholders; there is a clear financial incentive for this push.
     

  • Well, I've got news for you: every company involved has a financial incentive.

In the battle over exclusive inventory, Zillow, NAR, and MLSs stand in the way (some more effectively than others). 

  • Compass wants its customers – homesellers – to have the choice to advertise their properties however they see fit.
     

  • From Compass’s perspective, its fight against the industry is about control vs. choice – and this is what the leader of the combined entity believes.

The bottom line: There are plenty of corporate synergies in this deal, but, like Disney acquiring the Star Wars and Marvel franchises, the real strategic play is about content.

  • Controlling more content gives Compass more power in its fight with the existing industry hegemony.
     

  • This deal will shake up power dynamics in a way not seen in over a decade, and will shape the industry and corporate strategy for many years to come.